diff --git a/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js b/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
index 16b7b476fe82..db6e2ddd8b50 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
@@ -333,15 +333,31 @@ export function client_component(source, analysis, options) {
 	const body = [
 		...state.hoisted,
 		...module.body,
-		b.export_default(
-			b.function_declaration(
-				b.id(analysis.name),
-				[b.id('$$anchor'), b.id('$$props')],
-				component_block
-			)
+		b.function_declaration(
+			b.id(analysis.name),
+			[b.id('$$anchor'), b.id('$$props')],
+			component_block
 		)
 	];
 
+	if (options.hmr) {
+		body.push(
+			b.export_default(
+				b.conditional(
+					b.import_meta_hot(),
+					b.call('$.hmr', b.member(b.import_meta_hot(), b.id('data')), b.id(analysis.name)),
+					b.id(analysis.name)
+				)
+			),
+			b.if(
+				b.import_meta_hot(),
+				b.stmt(b.call('import.meta.hot.acceptExports', b.literal('default')))
+			)
+		);
+	} else {
+		body.push(b.export_default(b.id(analysis.name)));
+	}
+
 	if (options.dev) {
 		if (options.filename) {
 			let filename = options.filename;
diff --git a/packages/svelte/src/compiler/types/index.d.ts b/packages/svelte/src/compiler/types/index.d.ts
index 11e71f63a10f..033ce10f35ab 100644
--- a/packages/svelte/src/compiler/types/index.d.ts
+++ b/packages/svelte/src/compiler/types/index.d.ts
@@ -178,6 +178,16 @@ export interface CompileOptions extends ModuleCompileOptions {
 	 * @default null
 	 */
 	cssOutputFilename?: string;
+	/**
+	 * If `true`, compiles components with hot reloading support.
+	 *
+	 * @default false
+	 */
+	hmr?: boolean;
+
+	// Other Svelte 4 compiler options:
+	// enableSourcemap?: EnableSourcemap; // TODO bring back? https://github.com/sveltejs/svelte/pull/6835
+	// legacy?: boolean; // TODO compiler error noting the new purpose?
 }
 
 export interface ModuleCompileOptions {
@@ -224,6 +234,7 @@ export type ValidatedCompileOptions = ValidatedModuleCompileOptions &
 		sourcemap: CompileOptions['sourcemap'];
 		legacy: Required<Required<CompileOptions>['legacy']>;
 		runes: CompileOptions['runes'];
+		hmr: CompileOptions['hmr'];
 	};
 
 export type DeclarationKind =
diff --git a/packages/svelte/src/compiler/utils/builders.js b/packages/svelte/src/compiler/utils/builders.js
index bc6df3a8f061..4bd14bf99d1c 100644
--- a/packages/svelte/src/compiler/utils/builders.js
+++ b/packages/svelte/src/compiler/utils/builders.js
@@ -571,6 +571,20 @@ export function imports(parts, source) {
 	};
 }
 
+/**
+ * @return {import('estree').MemberExpression}
+ */
+export function import_meta_hot() {
+	return member(
+		{
+			type: 'MetaProperty',
+			meta: id('import'),
+			property: id('meta')
+		},
+		id('hot')
+	);
+}
+
 /**
  * @param {import('estree').Expression | null} argument
  * @returns {import('estree').ReturnStatement}
diff --git a/packages/svelte/src/compiler/validate-options.js b/packages/svelte/src/compiler/validate-options.js
index 1151ad0dc11e..181a2c7ab914 100644
--- a/packages/svelte/src/compiler/validate-options.js
+++ b/packages/svelte/src/compiler/validate-options.js
@@ -101,6 +101,8 @@ export const validate_component_options =
 				return input;
 			}),
 
+			hmr: boolean(false),
+
 			enableSourcemap: warn_removed(
 				'The enableSourcemap option has been removed. Source maps are always generated now, and tooling can choose to ignore them.'
 			),
diff --git a/packages/svelte/src/internal/client/hmr.js b/packages/svelte/src/internal/client/hmr.js
new file mode 100644
index 000000000000..9b79ac62eb1a
--- /dev/null
+++ b/packages/svelte/src/internal/client/hmr.js
@@ -0,0 +1,196 @@
+import { key_block } from './dom/blocks/key.js';
+import { source, set, get, push, pop, user_effect } from './runtime.js';
+import { current_hydration_fragment } from './hydration.js';
+import { child_frag } from './operations.js';
+import { STATE_SYMBOL, proxy } from './proxy.js';
+
+/**
+ * @typedef {Record<string | symbol, any> | undefined} ComponentReturn
+ *
+ * @typedef {any[]} ComponentArgs
+ *
+ * @typedef {(...args: ComponentArgs) => ComponentReturn} Component
+ *
+ * @typedef {{
+ *    set_component: (new_component: Component) => void
+ *    proxy_component?: (...args: ComponentArgs) => ComponentReturn
+ * }} HotData<Component>
+ */
+
+function get_hydration_root() {
+	function find_surrounding_ssr_commments() {
+		if (!current_hydration_fragment?.[0]) return null;
+
+		/** @type {Comment | undefined} */
+		let before;
+		/** @type {Comment | undefined} */
+		let after;
+		/** @type {Node | null | undefined} */
+		let node;
+
+		node = current_hydration_fragment[0].previousSibling;
+		while (node) {
+			const comment = /** @type {Comment} */ (node);
+			if (node.nodeType === 8 && comment.data.startsWith('ssr:')) {
+				before = comment;
+				break;
+			}
+			node = node.previousSibling;
+		}
+
+		node = current_hydration_fragment.at(-1)?.nextSibling;
+		while (node) {
+			const comment = /** @type {Comment} */ (node);
+			if (node.nodeType === 8 && comment.data.startsWith('ssr:')) {
+				after = comment;
+				break;
+			}
+			node = node.nextSibling;
+		}
+
+		if (before && after && before.data === after.data) {
+			return [before, after];
+		}
+
+		return null;
+	}
+
+	if (current_hydration_fragment) {
+		const ssr0 = find_surrounding_ssr_commments();
+		if (ssr0) {
+			const [before, after] = ssr0;
+			current_hydration_fragment.unshift(before);
+			current_hydration_fragment.push(after);
+			return child_frag(current_hydration_fragment, false);
+		}
+	}
+}
+
+function create_accessors_proxy() {
+	const accessors_proxy = proxy(/** @type {import('./types.js').ProxyStateObject} */ ({}));
+	/** @type {Set<string>} */
+	const accessors_keys = new Set();
+
+	/**
+	 * @param {ComponentReturn} new_accessors
+	 */
+	function sync_accessors_proxy(new_accessors) {
+		const removed_keys = new Set(accessors_keys);
+
+		if (new_accessors) {
+			for (const key in new_accessors) {
+				accessors_keys.add(key);
+				removed_keys.delete(key);
+
+				// current -> proxy
+				user_effect(() => {
+					accessors_proxy[key] = new_accessors[key];
+				});
+
+				// proxy -> current
+				const descriptor = Object.getOwnPropertyDescriptor(new_accessors, key);
+				if (descriptor?.set || descriptor?.writable) {
+					user_effect(() => {
+						const s = accessors_proxy[STATE_SYMBOL].s.get(key);
+						if (s) {
+							new_accessors[key] = get(s);
+						}
+					});
+				}
+			}
+		}
+
+		for (const key of removed_keys) {
+			accessors_keys.delete(key);
+			accessors_proxy[key] = undefined;
+		}
+	}
+
+	return { accessors_proxy, sync_accessors_proxy };
+}
+
+/**
+ * @param {Component} new_component
+ */
+function create_proxy_component(new_component) {
+	const component_signal = source(new_component);
+
+	let component_name = new_component.name;
+
+	/**
+	 * @type {HotData["set_component"]}
+	 */
+	function set_component(new_component) {
+		component_name = new_component.name;
+		set(component_signal, new_component);
+	}
+
+	// @ts-ignore
+	function proxy_component($$anchor, $$props) {
+		push($$props);
+
+		const { accessors_proxy, sync_accessors_proxy } = create_accessors_proxy();
+
+		// During hydration the root component will receive a null $$anchor. The
+		// following is a hack to get our `key` a node to render to, all while
+		// avoiding it to "consume" the SSR marker.
+		//
+		// TODO better get the eyes of someone with understanding of hydration on this
+		//
+		// If this fails, we get an ugly hydration failure message, but HMR should
+		// still work after that... Maybe we can show a more specific error message than
+		// the generic hydration failure one (that could be misleading in this case).
+		//
+		if (!$$anchor) {
+			$$anchor = get_hydration_root() || $$anchor;
+		}
+
+		key_block(
+			$$anchor,
+			() => get(component_signal),
+			($$anchor) => {
+				const component = get(component_signal);
+
+				// @ts-ignore
+				const new_accessors = component($$anchor, $$props);
+
+				sync_accessors_proxy(new_accessors);
+			}
+		);
+
+		pop(accessors_proxy);
+
+		return accessors_proxy;
+	}
+
+	try {
+		Object.defineProperty(proxy_component, 'name', {
+			get() {
+				return component_name;
+			}
+		});
+	} catch (err) {
+		// eslint-disable-next-line no-console
+		console.warn("[Svelte HMR] Failed to proxy component function's name", err);
+	}
+
+	return { proxy_component, set_component };
+}
+
+/**
+ * @param {HotData} hot_data
+ * @param {Component} new_component
+ */
+export function hmr(hot_data, new_component) {
+	if (hot_data.set_component) {
+		hot_data.set_component(new_component);
+	} else {
+		({
+			//
+			proxy_component: hot_data.proxy_component,
+			set_component: hot_data.set_component
+		} = create_proxy_component(new_component));
+	}
+
+	return hot_data.proxy_component;
+}
diff --git a/packages/svelte/src/internal/index.js b/packages/svelte/src/internal/index.js
index 72026e9389f1..c768b2680692 100644
--- a/packages/svelte/src/internal/index.js
+++ b/packages/svelte/src/internal/index.js
@@ -58,4 +58,6 @@ export {
 	$window as window,
 	$document as document
 } from './client/operations.js';
+
+export { hmr } from './client/hmr.js';
 export { noop } from './common.js';
diff --git a/packages/svelte/tests/snapshot/samples/class-state-field-constructor-assignment/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/class-state-field-constructor-assignment/_expected/client/index.svelte.js
index 38a74ef9bb87..5df2e33d9f15 100644
--- a/packages/svelte/tests/snapshot/samples/class-state-field-constructor-assignment/_expected/client/index.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/class-state-field-constructor-assignment/_expected/client/index.svelte.js
@@ -3,7 +3,7 @@
 import "svelte/internal/disclose-version";
 import * as $ from "svelte/internal";
 
-export default function Class_state_field_constructor_assignment($$anchor, $$props) {
+function Class_state_field_constructor_assignment($$anchor, $$props) {
 	$.push($$props, true);
 
 	class Foo {
@@ -26,4 +26,6 @@ export default function Class_state_field_constructor_assignment($$anchor, $$pro
 	}
 
 	$.pop();
-}
\ No newline at end of file
+}
+
+export default Class_state_field_constructor_assignment;
diff --git a/packages/svelte/tests/snapshot/samples/dynamic-attributes-casing/_expected/client/main.svelte.js b/packages/svelte/tests/snapshot/samples/dynamic-attributes-casing/_expected/client/main.svelte.js
index 6494d2436a09..889117aa6af5 100644
--- a/packages/svelte/tests/snapshot/samples/dynamic-attributes-casing/_expected/client/main.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/dynamic-attributes-casing/_expected/client/main.svelte.js
@@ -5,7 +5,7 @@ import * as $ from "svelte/internal";
 
 var frag = $.template(`<div></div> <svg></svg> <custom-element></custom-element> <div></div> <svg></svg> <custom-element></custom-element>`, true);
 
-export default function Main($$anchor, $$props) {
+function Main($$anchor, $$props) {
 	$.push($$props, true);
 
 	// needs to be a snapshot test because jsdom does auto-correct the attribute casing
@@ -45,4 +45,6 @@ export default function Main($$anchor, $$props) {
 
 	$.close_frag($$anchor, fragment);
 	$.pop();
-}
\ No newline at end of file
+}
+
+export default Main;
diff --git a/packages/svelte/tests/snapshot/samples/function-prop-no-getter/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/function-prop-no-getter/_expected/client/index.svelte.js
index f34a4933a345..97f4f9812220 100644
--- a/packages/svelte/tests/snapshot/samples/function-prop-no-getter/_expected/client/index.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/function-prop-no-getter/_expected/client/index.svelte.js
@@ -3,7 +3,7 @@
 import "svelte/internal/disclose-version";
 import * as $ from "svelte/internal";
 
-export default function Function_prop_no_getter($$anchor, $$props) {
+function Function_prop_no_getter($$anchor, $$props) {
 	$.push($$props, true);
 
 	let count = $.source(0);
@@ -33,4 +33,6 @@ export default function Function_prop_no_getter($$anchor, $$props) {
 
 	$.close_frag($$anchor, fragment);
 	$.pop();
-}
\ No newline at end of file
+}
+
+export default Function_prop_no_getter;
diff --git a/packages/svelte/tests/snapshot/samples/hello-world/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/hello-world/_expected/client/index.svelte.js
index f57dd8a9fdc0..6fbc915a4bf9 100644
--- a/packages/svelte/tests/snapshot/samples/hello-world/_expected/client/index.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/hello-world/_expected/client/index.svelte.js
@@ -5,7 +5,7 @@ import * as $ from "svelte/internal";
 
 var frag = $.template(`<h1>hello world</h1>`);
 
-export default function Hello_world($$anchor, $$props) {
+function Hello_world($$anchor, $$props) {
 	$.push($$props, false);
 	$.init();
 
@@ -14,4 +14,6 @@ export default function Hello_world($$anchor, $$props) {
 
 	$.close($$anchor, h1);
 	$.pop();
-}
\ No newline at end of file
+}
+
+export default Hello_world;
diff --git a/packages/svelte/tests/snapshot/samples/svelte-element/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/svelte-element/_expected/client/index.svelte.js
index b2734b8c4648..257bb47d66ed 100644
--- a/packages/svelte/tests/snapshot/samples/svelte-element/_expected/client/index.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/svelte-element/_expected/client/index.svelte.js
@@ -3,7 +3,7 @@
 import "svelte/internal/disclose-version";
 import * as $ from "svelte/internal";
 
-export default function Svelte_element($$anchor, $$props) {
+function Svelte_element($$anchor, $$props) {
 	$.push($$props, true);
 
 	let tag = $.prop($$props, "tag", 3, 'hr');
@@ -14,4 +14,6 @@ export default function Svelte_element($$anchor, $$props) {
 	$.element(node, tag, false);
 	$.close_frag($$anchor, fragment);
 	$.pop();
-}
\ No newline at end of file
+}
+
+export default Svelte_element;
diff --git a/packages/svelte/types/index.d.ts b/packages/svelte/types/index.d.ts
index d3fb1f340d58..db3a6f73af1f 100644
--- a/packages/svelte/types/index.d.ts
+++ b/packages/svelte/types/index.d.ts
@@ -671,6 +671,16 @@ declare module 'svelte/compiler' {
 		 * @default null
 		 */
 		cssOutputFilename?: string;
+		/**
+		 * If `true`, compiles components with hot reloading support.
+		 *
+		 * @default false
+		 */
+		hmr?: boolean;
+
+		// Other Svelte 4 compiler options:
+		// enableSourcemap?: EnableSourcemap; // TODO bring back? https://github.com/sveltejs/svelte/pull/6835
+		// legacy?: boolean; // TODO compiler error noting the new purpose?
 	}
 
 	interface ModuleCompileOptions {
@@ -2412,6 +2422,16 @@ declare module 'svelte/types/compiler/interfaces' {
 		 * @default null
 		 */
 		cssOutputFilename?: string;
+		/**
+		 * If `true`, compiles components with hot reloading support.
+		 *
+		 * @default false
+		 */
+		hmr?: boolean;
+
+		// Other Svelte 4 compiler options:
+		// enableSourcemap?: EnableSourcemap; // TODO bring back? https://github.com/sveltejs/svelte/pull/6835
+		// legacy?: boolean; // TODO compiler error noting the new purpose?
 	}
 
 	interface ModuleCompileOptions {
diff --git a/playgrounds/demo/vite.config.js b/playgrounds/demo/vite.config.js
index de42e9cfd4a5..3755f768c811 100644
--- a/playgrounds/demo/vite.config.js
+++ b/playgrounds/demo/vite.config.js
@@ -2,7 +2,13 @@ import { defineConfig } from 'vite';
 import { svelte } from '@sveltejs/vite-plugin-svelte';
 
 export default defineConfig({
-	plugins: [svelte()],
+	plugins: [
+		svelte({
+			compilerOptions: {
+				hmr: true
+			}
+		})
+	],
 	optimizeDeps: {
 		// svelte is a local workspace package, optimizing it would require dev server restarts with --force for every change
 		exclude: ['svelte']